Ethical screens

It’s common for law students to clerk for a couple different firms during their law-school years. When a law clerk or a law school graduate you hire has clerked for a firm representing a party adverse to your client, what happens? Is the student or newly-minted lawyer disqualified from working on your matter? Is your whole firm disqualified? Can you screen the clerk/former clerk and solve the problem? Two recent ethics opinions out of Texas and Ohio clarify the rules.

Lone Star ethics opinion

The issue, of course, is centered on state versions of Model Rules 1.7, 1.9 and 1.10. Firms have a justifiable concern that they may be precluded from taking on work — or worse, be disqualified from an ongoing matter — if a law clerk or new lawyer joins the firm after having worked for opposing counsel. Acquiring confidential client information can disqualify the clerk from working on the adverse matter at the new firm and the conflict can be imputed to the whole firm.

In March 2016, the Texas Supreme Court amended Texas Disciplinary Rule of Professional Conduct 1.06, its unique version of the Model Rule on conflicts, to add a comment addressing how conflict imputation works for non-lawyer employees and lawyers who were formerly involved in a matter in a non-lawyer role. Comment [19] provides that with proper screening, the conflict of interest of a non-lawyer, or the conflict of a lawyer that arose before the person became a lawyer, is not imputed:

A law firm is not prohibited from representing a client … merely because a nonlawyer employee of the firm, such as a paralegal or legal secretary, has a conflict of interest arising from prior employment or some other source…. [or] … merely because [of] … a conflict of interest arising from events that occurred before the person became a lawyer, such as work that the person did as a law clerk or intern. But the firm must ordinarily screen the person with the conflict from any personal participation in the matter to prevent the person’s communicating to others in the firm confidential information that the person and the firm have a legal duty to protect.

The new Texas ethics opinion applied the new comment and ruled that when a firm hires a new associate who worked as a clerk for the firm representing the opposing party, the former clerk is disqualified from working on the case at the new firm, but that the new firm can screen the clerk and avoid imputation of the clerk’s conflict. That sensible approach is good news for Texas firms and law clerks, and the comment is broadly aimed at other incoming non-lawyer employees, such as secretaries, too.

Buckeye ethics opinion

Over in my bailiwick, Ohio’s Board of Professional Conduct issued similar advice earlier this summer. Based on Ohio’s rules of practice governing certified legal interns, who effectively function as lawyers under clinical supervision even while in law school, the Board said that:

The conflicts of a former legal intern, newly employed as a lawyer, are not imputed to the lawyers in a law firm, but necessitate the screening of the lawyer from any matter [for which] he or she had substantial responsibility.

On the other hand, the Board said, the conflicts of current legal interns are imputed to the firms they simultaneously clerk for. That seems fair, because by being certified under the state’s legal intern rules, the students working at their school legal clinics are more like lawyers, and should be treated as such for conflicts purposes, while striking a balance in favor of their post-law school employability.

Check your rules

As always, these principles come in lots of flavors, and you must know your own jurisdiction’s approach. Texas and Ohio have gotten it right, protecting clients’ legitimate confidentiality interests, and maximizing the ability of law firms to bring on new lawyers, which of course benefits the firms and the lawyers.

Small may be beautiful, but when it comes to law firms, small can signal disqualification troubles that a bigger firm might sometimes be able to avoid, according to the reasoning of a recent opinion.

We’ve posted here before about screening non-lawyer personnel in order to avoid imputed disqualification when a secretary or paralegal arrives at your firm with a conflict.

In the recent case, Ullman v. Denco, a New Mexico federal court magistrate judge granted disqualification, booting defendants’ counsel from eleven consolidated employment cases after the firm hired a paralegal from the firm representing the plaintiffs.

Side-switching paralegal

The paralegal had worked extensively on the cases; she had interviewed most of the clients, and had detailed information about plaintiffs’ legal strategies and bottom line settlement numbers.

Under those circumstances, the side-switching paralegal clearly could not herself participate in the consolidated case. The question was whether her personal disqualification would be imputed to the entire six-lawyer defense firm — especially considering the fact that the defense firm had quickly put up an elaborate ethical screen.

Ethical screen terms

The screen isolated the paralegal’s office from the locked office where the files on the cases were kept; mail relating to the case was separately routed; electronic documentation was password protected; an office-wide “admonition” was issued against sharing confidential information and even speaking openly about the cases within the office.

The magistrate judge held that the paralegal’s disqualifying conflict would not be imputed to the rest of the firm. Comment [4] to New Mexico’s version of the conflict imputation rule, Model Rule 1.10, says that the disqualification rules do not “prohibit representation by others in the law firm where the person prohibited from involvement in a matter is a non-lawyer, such as a paralegal or legal secretary.”

However, the defense firm’s continued representation of its employer clients was doomed anyway, because the magistrate judge held that even the comprehensive screen the firm proposed “would not be effective” — in part because the firm was just too small.

Small firm — harder to make a screen work

The court recognized that screening, “if effective to protect any client confidences that the non-lawyer gained from prior employment, can avoid the harsh remedy of disqualification.”

But here, a factor that “weigh[e]d heavily” against the screen’s effectiveness was that the defense firm was “relatively small.” Three of the lawyers, or half the firm’s active attorney roster, were involved in the consolidated case; all lawyers and support staff worked in the same building; and the firm’s staffing needs were so pressing that they could not delay the paralegal’s start date even three weeks, until after a scheduled mediation of the case. The firm’s small size made it unlikely that the confidential information could actually be sealed off.

Other factors mandating DQ

In addition to the defense firm’s small size, the magistrate judge noted that the information the paralegal had was extremely sensitive and relevant, and that she had been very heavily involved on the other side of the case. Finally, there was a short time lag between the defense firm’s first contact with the paralegal and implementation of the screen. The gap was only two days — but combined with the other factors, it helped scuttle the defense firm’s representation.

Even a good screen…

The magistrate judge did not fault the firm’s screening procedures — in fact, he said they met and even exceeded measures endorsed in other disqualification cases. But combined with the firm’s small size and the other factors, even a good screen did not suffice.

And for firms large and small, this case is also a reminder about the importance of conflict checking everyone who joins the firm — even non-lawyers.

Can a non-lawyer staff member who joins your firm bring with her a conflict of interest that may be imputed to your firm and disqualify you from representing your client? It can happen.

In this age of employment mobility, staff members may come to your firm after having worked for opposing counsel on cases (or transactions) that you are handling. The staffer’s exposure to the other side’s confidential information can raise a conflict of interest that knocks you and your whole firm out of the box.

Many jurisdictions allow law firms to resolve the potential problem at the front end with an ethical screen. Georgia has recently joined the list.

In Hodge v. URFA-Sexton, LP, the Georgia Supreme Court noted that the majority of courts reject the idea that non-lawyer conflicts are automatically imputed to the rest of the firm. Rather, most jurisdictions now allow firms to raise a screen to protect the confidential information that a non-lawyer has gained during prior employment.

This made sense to the Hodge court for several reasons:

Non-lawyers lack a financial interest in the outcome of litigation, and don’t have a choice about what clients they serve;

Non-lawyers have different training and responsibilities, and a different level of access to confidential information than lawyers do;

Disqualifying a firm based on a staff member’s conflict of interest works a hardship to the new firm’s client; and

Interestingly, Georgia limits screening as a way to avoid imputed conflicts of interest — only former public sector employees, arbitrators and judges (and now non-lawyers) can be screened in order for the firm to avoid being disqualified.

In Ohio, non-lawyer screening was approved in Green v. Toledo Hospital, where the Ohio Supreme Court held that imposing the presumption that a secretary who worked for opposing counsel shared in client confidences would “unfairly taint” her. Applying the presumption would make it particularly difficult for non-lawyer personnel in small towns, where the pool of available employers (and employees) is limited.

About this Blog

The Law for Lawyers Today is a resource for law firms, law departments and lawyers needing information to meet the challenge of practicing ethically and responsibly. Here you’ll find timely updates on legal ethics, the “law of lawyering,” risk management and legal malpractice, running your legal business— and more.

About Thompson Hine

For more than a century, Thompson Hine has been committed to excellence on behalf of our clients, our people and the communities in which we live and work. Clients rank us among the top firms in the United States for client service year after year, and we are proud of the accolades we have earned in recognition of our capabilities and leadership.